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Beginning of the ‘museum’ scenario for Snowy Scheme if privitisation avoided; internal note on the impact on Snowy Hydro of privatisation plan

Posted by gmarkets on 27 September, 2007

According to Matthew Stevens, if Snowy Hydro was forced to sit out the retail resolution, it will lose key customers for its power, reported The Australian (19/9/2007, p.34).

Stick a fork in Snowy scheme; it’s done: “This is the beginning of the ‘museum’ scenario for the Snowy Scheme,” Charlton wrote this week in an internal note on the impact on Snowy Hydro of the privatisation plan. “This is the own goal that the vocal nostalgics so joyously kicked when they contributed to the failure of the IPO,” he wrote. “Our competitors, as they become more ‘private sector’ over the near term, will become more aggressive, more efficient and will grow even larger and more vertically integrated while we stand relatively still,” he wrote.

Continued Govt ownership spells doom: “Our competitors will get big­ger and we are unable to keep pace with them and we are unable to expand our retail business which would have been vital internal protection from our customers needing less of our products in the future. Those that think the Snowy Scheme is best protected by having it remain as the only government owned major elec­tricity industry participant are seriously misguided and have little understanding of how com­mercial markets work.”

The Australian, 19/9/2007, p. 34

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